AP®︎ Business with Personal Finance: Topic 1.1 Flashcards

Master key terms and definitions for Topic 1.1 of AP Business with Personal Finance – What Is a Business? to help you prep for quizzes and the AP exam.

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Term

Business

Definition

An organization or entity that produces and distributes products and may operate at any size, face-to-face, virtually, or both

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Business
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An organization or entity that produces and distributes products and may operate at any size, face-to-face, virtually, or both

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Product
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A good, a service, or a combination of the two produced and distributed by a business

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Good
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A tangible product, such as food, clothing, or a computer

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Service
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An activity or benefit provided to a customer

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Customer
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An individual or business that purchases a good or service

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Consumer
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An individual who uses a good or service, whether or not that individual purchased it

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Problem
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A difficulty, obstacle, inconvenience, or unsatisfactory condition experienced by a customer

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Need
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Something required or considered important for a person or business to function or accomplish an objective

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Want
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A preference or desire that is not necessarily required to accomplish a basic objective

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Market Opportunity
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A possible opening to provide a product addressing a customer problem, need, or want that customers will purchase

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Problem-Solution Fit
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The condition in which a proposed good or service meaningfully addresses the selected customers' problem, need, or want

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Value
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The worth or benefit of a product to customers

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Value Creation
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Providing a product that responds to customers' problems, needs, or wants and produces benefits for them

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Value Capture
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Charging a product price above its production cost; amount captured per unit = price per unit − production cost per unit

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